Legal Question in Bankruptcy in Michigan

Re: What are my options

The first thing you should do is carefully review your Judgment of Divorce. I include an anti-bankruptcy clause in all of my judgments which provides that if one party discharges a debt held jointly with the other spouse, then any money the non-filing spouse becomes liable for, is paid by the filing spouse to the non-filing spouse as non-dischargeable spousal support. This provision has saved numerous clients. If you have that clause in your judgment of divorce, you can take your ex back to the court handling the divorce to collect the money you have had to pay on the mortgages. You can get an income withholding order and garnish his wages to collect this money.

If there is no anti-bankruptcy clause in the judgment, you will be liable for the deficiency on both mortgages. Be very careful as many mortgage companies are issuing 1099 tax forms to those who default on their mortgages in the amount of the deficiency (the amount of loss incurred by the mortgage company once the property is sold). You may want to consider filing a bankruptcy action as it will discharge your liability on these debts. If there is equity in the home, you may want to motion the court to order the sale of the home. If this is the case, you would want to let the mortgage company attorneys know about the sale and ask them to hold off on collecting from you until closing on the sale.

If you consider filing bankruptcy, you can file an emergency action which will immediately stop the garnishment. Because the filings in bankruptcy courts are all electronic, we can file bankruptcies 24 hours a day, 7 days a week. Let me know if you need further assistance as my office handles bankruptcy actions throughout the entire state.